Skip Navigation
THE FEDERATION PRESS
 
 
Password
Online Bookstore Book Supplements Newsletter Subscription For Academics For Bookshops For Authors About Us JournalsHolt Prize
     
 

The Law of Insider Trading in Australia

By Gregory Lyon and Jean du Plessis

CONTENTSREVIEWS
This book provides a detailed and practical analysis of Australian Insider Trading Laws. Written jointly by Gregory Lyon of the Melbourne Bar and Professor du Plessis of Deakin University, the work:
  • Examines all fundamental concepts relating to insider trading such as ‘who is an insider’, ‘what is inside information’ and ‘when is information generally available’, together with commentaries on proposed changes to the laws and an examination of the impact of the most recent decisions, including Hannes, and Rivkin;
  • Provides a very detailed examination of the defences and exceptions, with particular attention to the operation of Chinese Walls;
  • Analyses fully and systematically the provisions on insider trading in the Corporations Act and the Criminal Code (Cth) within the context of decided cases and relevant secondary materials; 
  •  Covers comprehensively the penalties and remedies for contravention of the insider trading regime. This includes the intricate civil compensation provisions, and an up-to-date analysis of the civil penalties regime in light of ASIC v Petsas;
  •   Discusses the operation and effectiveness of continuous disclosure as a means of preventing insider trading.

CONTENTS

Introduction

Overview
The Definition of Insider Trading
Difficulties with the Definition of Insider Trading
Statement of the Definition

The Operation of the Current Legislative Provisions Prohibiting Insider Trading

Introduction
Complexity of Current Insider Trading Law
Jurisdictions of the Insider Trading Prohibitions
Who is an Insider?
What is Inside Information?
Possession of Insider Information
Material Effect of Information
When is Information Generally Available?
Introduction
Legislative History of Generally Available
The Publishable Information Test
Readily Observable
Deductions, Conclusions or Inferences and Market Analysts
Securities and Financial Products
The Requisite Mental State
The Transactions to Which the Prohibited Conduct Applies
Trading
Procuring
Communicating ('Tipping')
The Efficacy of the Operation of the Current Provisions
Conclusion

The Exceptions and Defences to the Prohibition

Introduction
Overview
The Various Use of the Terms 'Exceptions' and 'Defences'
The Burden of Proof for the Operation of Exceptions and Defences
The Provenance of the Exceptions and Defences
The Legislative Exceptions to the Prohibition
Withdrawal from a Registered Scheme
Underwriting Agreements
Purchases Pursuant to Legal Requirement
Communication Pursuant to Legal Requirement
Chinese Walls
Exception for Knowledge of Person's Own Intentions or Activities
The Exceptions under the Corporations Regulations
Director Obtaining a Share Qualification
Acquisition of Securities under a Superannuation or Pension Fund Scheme
Specified Insolvency Transactions in Good Faith
Sale Under a Mortgage, Charge, Pledge or Lien
The Statutory Defences
Reform of Defences
Conclusion

Penalites and Remedies

Introduction
Who may be the Subject of an Action?
Primary Liability as an Insider
Ancillary Liability
Criminal Consequences for Insider Trading
Initiating Prosecutions
Penalities for Insider Trading
Disqualification from Directorships/Managing a Corporation
Proceeds of a Crime
The Practical Operation of the Criminal Sanctions - Hannes and Rivkin
Overview
R v Hannes
R v Rivkin
Civil Remedies
Overview
Sections 1043L and 1317HA
The Trigger for Compensation
Specific Circumstances for the Order of Compensation
Civil Penalties
Nature of Civil Penalties
Declaration of Contravention
Pecuniary Penalty
Disqualification and Civil Penalties
Effectiveness of Civil Penalty Provisions
The Future Role of Civil Penalties
Conclusion

Enforcement and the Interrelationship Between Insider Trading and Continuous Disclosure

Introduction
Problems of Enforcement
Overview
Frequency of Insider Trading
Difficulties of Detection
An Inefficient Regulator?
The Complexity of the Legislation and the Inadequacy of Penalties
The Interrelationship Between Continuous Disclosure and Insider Trading
Overview of Suggested Solutions to Problems of Enforcement
The Continuous Disclosure and Insider Trading Provisions
The Theoretical Underpinnings of Australia's Mandatory Disclosure Regime
Disclosing Entities and Entities Exempted From Continuous Disclosure
Entities Which Must Make Continuous Disclosure
Disclosure Requirements on Listed Disclosing Entities
The Disclosure Requirements for Unlisted Disclosing Entities
Information Which Must Be Disclosed
Australian Stock Exchange Listing Rules on Continuous Disclosure
Overview
The Operation of the Listing Rules in Respect to Continuous Disclosure
The Exception to the Disclosure Requirement
Structured/Periodical Disclosure
Enforcement of the Continuous Disclosure Requirements
Engendering a 'Culture of Discussion'
Proposals for the Administrative Enforcement of Continuous Disclosure
Conclusion

Appendix One: Table of Australian Insider Trading Cases

Criminal Prosection
Civil Litigation
Key

Bibliography

Articles/Books/Reports
Case Law
Legislation
Other material

REVIEWS

A concise but comprehensive introduction describes the contextual framework within which the insider trading prohibition exists. It outlines the development of the relevant legislation and explains the legislative and regulatory background to the law as it currently stands. It makes reference to the reports of various legislative and law reform bodies, as well as other secondary materials such as Explanatory Memoranda.
The bulk of the book comprises four main chapters, which explain the current provisions regulating insider trading, the exceptions and defences to the prohibition, penalties and remedies, and matters regarding enforcement and continuous disclosure. …
The main chapters are comprehensive and well written. Rather than separating academic and practical aspects, every part of the commentary refers directly to the relevant theoretical background and secondary material. As a result of this, the reader can readily find most of the relevant theoretical and practical information about each point, without spending too much time cross-referencing. This structure adds greatly to the usefulness of the book.
The Law of Insider Trading in Australia is a work of academic and practical merit. It will prove an indispensable reference to anybody faced with a question or problem concerning insider trading.

SJ Maiden, Australian Business Law Review, (2006) 34 ABLR 466

The obvious thoroughness of the research that underpins the legal propositions and policy matters that are discussed, along with the precise yet accessible nature of the manner in which the authors convey this information to the reader, mean that it is easy to recommend this book to all law students, academics, practitioners and judicial officers who are looking for a comprehensive reference work on the laws prohibiting insider trading in Australia.

Stephen Knight, (2006) 26 Qld Lawyer

The Law of Insider Trading in Australia comprehensively examines and explains each element of the insider trading offence. ... Relevant case law, statutory provisions and academic commentary are reviewed in detail. Informative analyses of recent cases … are included. The impact of potential law reform proposals, such as those which have emanated from the Corporations and Markets Advisory Committee are also discussed. …
Most interestingly the relationship between insider trading laws and continuous disclosure obligations is examined in significant detail. This is a very well-considered chapter of the book, addressing the role of the Australian Stock Exchange in detecting and acting upon suspected insider trading activity, examining Australian continuous disclosure rules, as well as reviewing and discussing the perceived difficulties in successfully enforcing insider trading laws. …
I recommend this book very highly. … It is not a lengthy read, but the subject matter is addressed clearly and concisely presented in a well ordered and thoughtful style. It provides easy-to-read information about insider trading which will assist those who are only vaguely familiar with this offence, but more complex aspects of insider trading are also considered in significant detail for more demanding readers.

Juliette Overland, Company & Securities Law Journal Vol 24, 2006

A concise but comprehensive introduction describes the contextual framework within which the insider trading prohibition exists. It outlines the development of the relevant legislation and explains the legislative and regulatory background to the law as it currently stands. It makes reference to the reports of various legislative and law reform bodies, as well as other secondary materials such as Explanatory Memoranda.
The bulk of the book comprises four main chapters, which explain the current provisions regulating insider trading, the exceptions and defences to the prohibition, penalties and remedies, and matters regarding enforcement and continuous disclosure. …
The main chapters are comprehensive and well written. Rather than separating academic and practical aspects, every part of the commentary refers directly to the relevant theoretical background and secondary material. As a result of this, the reader can readily find most of the relevant theoretical and practical information about each point, without spending too much time cross-referencing. This structure adds greatly to the usefulness of the book. ...
The Law of Insider Trading in Australia is a work of academic and practical merit. It will prove
an indispensable reference to anybody faced with a question or problem concerning insider trading.

(2006) 34 ABLR 466

Rarely have two authors had a publication as timely as The Law of Insider Trading in Australia. Virtually every journalist would have required or should have acquired a copy of this text to assist them in the many and varied issues that arose in the recent Vizard action. …
The authors are to be commended for providing such a readable guide through the quite difficult provisions that make up the insider trading regime in Austrlaia. The text will certainly become essential reading for lawyers involved in the area, directors who may be tempted to profit from such information, and journalists.

Mark Harrick, Law Institute (Victoria) Journal, Vol 79.10, October 2005

For anyone still confused by the ins and outs of the Steve Vizard case, a must-read book was released this week, just days before Vizard's civil case begins Federal Court. The Law of Insider Trading in Australia, by Gregory Lyon and Jean Jacques du Plessis (The Federation Press 2005) could become the Harry Potter of the legal world, although co-author du Plessis says the timing is just a "happy coincidence."

crikey.com.au, 19 July 2005

According to the foreword provided by MEJ Black AC, the Chief Justice of the Federal Court of Australia, the authors have “produced a scholarly work of great value which addresses pressing questions about Australia’s insider trading laws.” Even the most cursory consideration of the work serves to confirm the views expressed by the Chief Justice. …
This book makes an outstanding contribution to the body of corporations related texts in the country and is likely to become the pre-eminent source of reference for the law of insider trading in this country. It will be of considerable interest and assistance to students, academics and practitioners and individuals involved in law enforcement.

Anthony Lo Surdo, Barrister, Australian Banking and Finance Law Bulletin, Vol 21 No 3, August 2005

   

Published 17 June 2005
Publisher The Federation Press
Hardback/239pp
ISBN 9781862875630
Australian RRP $150.00
International Price $140.00
currency converter

Available


Law - Commercial
Law - Company & Securities


        BACK TO TOP